This lesson is general education about U.S. personal finance, not financial, tax or investment advice. Tax rules and limits change every year; check IRS.gov or a qualified professional for your situation.
What you’ll learn
- Gross pay is what you earned; net pay is what’s left after taxes and deductions.
- Social Security takes 6.2% of wages up to $184,500 in 2026, and Medicare takes 1.45% with no cap.
- Pre-tax deductions, such as traditional 401(k) contributions, lower your taxable wages.
- Check every stub for the right hours, rate and deductions, and keep the last one of the year.
A pay stub can look like a wall of abbreviations. Read from top to bottom, it’s a simple subtraction: what you earned, minus what was taken out, equals what you received.
Earnings
The top section shows your gross pay: hours worked times your hourly rate, or your salary divided by the number of pay periods. Overtime, tips, bonuses and commissions usually appear on separate lines. Check the hours and rate first; mistakes here affect everything below.
Pre-tax deductions
Some deductions come out before income tax is calculated, which lowers your taxable wages:
- traditional 401(k) or 403(b) contributions
- health, dental and vision premiums paid through your employer
- health savings account (HSA) or flexible spending account (FSA) contributions
Taxes
| Line | What it is |
|---|---|
| Federal income tax | Withheld based on your pay and the W-4 you filed |
| Social Security (OASDI) | 6.2% of wages, up to $184,500 of wages in 2026 |
| Medicare | 1.45% of all wages, plus 0.9% on wages above $200,000 |
| State and local income tax | Depends on where you live and work; some states have none |
Social Security and Medicare together are often labeled FICA. Your employer pays a matching share that doesn’t appear as a deduction from your pay.
Post-tax deductions
These come out after taxes: Roth 401(k) contributions, union dues, some insurance, and any wage garnishments.
Try the math. Say you earn $2,000 gross every two weeks and put 5% ($100) into a traditional 401(k). Social Security is 6.2% of $2,000, or $124, and Medicare is 1.45%, or $29. Federal income tax is figured on $1,900, because the 401(k) contribution came out first, while Social Security and Medicare are still figured on the full $2,000.
Why it’s worth checking every time
Payroll errors happen: a missed overtime hour, a benefit you didn’t choose, the wrong state. Raise problems with your employer quickly, while the records are fresh.
If your federal withholding looks too high or too low, the fix is a new W-4. Our lesson on filling out a W-4 explains how. At the end of the year, your stubs help you check the W-2 you’ll use to file your tax return.
Common questions
Does my employer have to give me a pay stub?
Federal law doesn’t require one, but most states do, either on paper or electronically. Your state labor department can tell you the rules where you work.
Why is my first paycheck smaller than I expected?
Common reasons include a partial first pay period, benefits deductions starting, or withholding based on your W-4. Compare the hours and rate on the stub with your offer letter.
What does YTD mean?
Year to date: the running total for the calendar year. Your final YTD figures should match the wages and taxes on your W-2.